The first step is analyzing the sources of retirement income you can anticipate, how much you can expect these sources to provide, and the changes—if any— you should consider making in the way you’re investing and managing your money. As you transition from work to retirement, you may want to rethink your approach to asset allocation, or the percentages of your investment portfolio you assign to different asset classes. Since your taxable and tax-deferred investments are held in different accounts, you may—like many people—have been allocating them separately, rather than as components of a single portfolio. That may work fine. But rather than owning several assets classes in each type of account to help manage risk, you may want to concentrate certain types of investments in your taxable accounts and other types in your tax-deferred or tax-free Roth accounts. So, for example, instead of owning equity, debt, and some alternative investments in both retirement and nonretirement accounts, you may want to emphasize equities in one and bonds and cash in another. Among the factors you’ll want to consider in making these choices are how any earnings will be taxed, whether withdrawals are required, and the rates at which assets have   Read more…